It has been part of the cycle of life to do certain things in season. As we enter the fall, we see the farmers gathering the harvest, the boats of summer being put in storage, our furnace filters being replaced, leaves being raked and a host of other “fall” action items. The holidays and family-gatherings are just around the corner.
Fall is a good time to also get your affairs in order so you can spend a comfortable, content winter by the fire or go south. And everyone has a best way to do that – some with simple account registration changes, others with wills and powers-of-attorney, and some with trust arrangements. Each family situation is different and what is a good fit for one might be too complex or too expensive for someone else.
Yes, trusts are great and the best tool in some situations, but don’t buy the sales pitch “You need a trust” until you meet with us, to explain where trusts work best and whether it fits your situation. A Corvette is a great, fun car to drive but try driving to work in one through the snow. When you have the right vehicle, you save money.
We can survive the winter that is coming but it will be much easier if we prepare now.
Many of the estate planning conferences we conduct with clients fall into a discussion of children – their strengths, weaknesses, and the hopes that clients have for their future. Then we talk about stuff: how much stuff do the clients own? How much stuff might be left after long-term illness and nursing home bills are paid? What will the children do with the stuff:
On a deeper level, however, I would raise with all clients “What will your children remember about you”? That usually brings a shocked, blank stare, as that question is not usually raised by anyone else. But it is an important question, because, for most, parental relationships have the greatest effect on a child’s personality, adjustment, and life success. And I can say, from the perspective of 40 years doing this, it is rarely how much money or property a child inherited that answers the question.
One’s legacy, from my perspective, is more about value systems, perspectives on life challenges, goal-setting, love, affection, forgiveness, and shared experiences, like family outings, vacations, holidays, than about inheritance. So when you arrive at the point in life where you are planning for not being here and what will happen in your absence, think on those matters and don’t miss an opportunity to add another great memory to the book, rather than an additional valuable piece of property. Focus on what really counts. We can help guide the discussion.
I have been watching carefully everything that comes out of Washington regarding estate tax this year. Mostly, it has just been rumors, but with Congress deadlocked on tax, the possibilities have been scary for our clients. With no action, the federal estate tax would revert to $1M on January 1, which puts many seniors at risk for a hugh bill. Also rumored was that that if Obama were re-elected, the confrontation between the parties would, in the best case, result in a $3.5M limit. Now, according to Kiplinger’s tax notes this week, the experts say the $5M limit will likely be extended in a special deal over the holidays. That is a Christmas present to many of our elderly clients, knowing they can carry out their estate plans.
It’s not all about tax, though. It’s about legacy – a communication of values and principles learned over a lifetime to a community and a family. We would love to talk with you about your legacy. Blessings, Tim